Creating Wealth with Oil and Gas – How?  

Posted by Oilism.com on January 8th, 2011 at 06:38am

Creating Wealth with Oil and Gas – How?  

Article by anirban

USA grants mineral rights to all property owners. In this aspect, the US is different from most of the other countries. The property owner can sell, lease or bequeath his mineral rights. The mineral rights can be sold independent of the property and the rights can be sold to an oil and gas company for just oil and gas. This is significant because the term mineral has wide ramifications to include metals and their ores, non-metals and even gravel and peat and coal. Therefore, if you want to create wealth with your oil and gas remember to negotiate hard for an oil and gas lease.

To start with it’s best to get a reputed geologist from your area who can check out your property and the general neighborhood to give you an appreciation of the likely oil and gas content in your property. Next, get a good local oil and gas consultant to look after the legal aspects of your lease.

Briefly, these aspects are to check out the antecedents or the background of the lessee, the oil and gas company, and bid for the highest possible financial terms in your favor. These terms are the bonus and the percentage of royalty. The oil and gas consultant will also guide you regarding the lease form and the initial term of the lease that should not normally exceed three years. Your power to bargain increases if you are in an oil rich area. The bonus and the royalty are both guided by this factor.

The lease must relate to only one tract. If you have multiple contiguous tracts this must be clearly spelt out while drawing up the lease with the oil and gas company. The lessee must specify the depth of perforation beyond which all levels would be released after the primary term is completed. The lease must also specify indemnity provisions to compensate you in the case of damage to property or loss of crops or cattle owing to the operations of the lessee. Finally, the lessee is responsible for plugging the oil well on termination of production.

About the Author

Royaltypurchaser.com specializes in purchasing of oil and gas royalties, Mineral rights and mineral rights from estates and individuals. Also, buys oil and gas company in return of cash from parties in Texas, Oklahoma, Louisiana, West Virginia, New Mexico, Michigan, California, Illinois, Montana, Canada and many other North American locations.

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